Case Study by

£5.5million mortgage for Russian client in London

17 May 2018

THE SCENARIO

Securing large mortgages for Russians in London can be a tricky proposition in the current political climate, which is frustrating for the many Russian individuals who have invested heavily in the UK throughout their lives. I recently assisted one such client, a high net worth individual (HNWI) who was referred to Enness by a trusted introducer.

This client was now a British citizen, with a wife and two children in school in the UK. He had been a successful financial trader, but had taken time out to renovate the £30million Knightsbridge property he now lived in. However, the property in question for this case was another £11million property in London, which he had been looking to sell.

His motivation for the sale was that he had taken out expensive bridging finance against this asset, which he now needed to exit. Unfortunately, the recent softening of the UK ultra-high net worth (UHNW) property market meant he was struggling to sell.

OUR SOLUTION

I therefore suggested that, instead of trying to sell, we refinance the bridging loan onto a buy-to-let (BTL) facility. The rental income could then be used to cover these repayments, and my client could also raise some more capital to get back into financial trading, which was another motivation of his.

I explained we could take out £5.5million against the asset, or 50% loan to value (LTV), which would both pay off the bridge and create the additional liquidity for my client to begin trading. However, virtually every lender was unwilling to consider my client, due to his nationality and the fact that he was asset-rich but low in liquidity.

Fortunately, I found a needle in the haystack—a lender who was willing to not only work with a Russian client, but also offer the loan on the basis of the expected rental income, as opposed to my client’s personal income. This lender was happy to offer a variable rate product at 3.59% with no exit penalties, meaning my client can sell the property if the market picks back up, if he so chooses.

This is a prime example of how Enness Private Office can assist complex, global clients; no matter your nationality or where you’re buying in the world, we can help. Mortgages for Russians in London is undoubtedly a difficult area but our extensive network and experiencing deal with UHNW individuals means we are ideally placed to help.

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IF YOU’RE CONSIDERING CONSOLIDATING DEBT AGAINST YOUR MAIN HOME, THEN PLEASE THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.